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28 February

Pre-Nuptial Agreements

I have been very interested in the press coverage around prenuptial agreements and the Law Commission’s suggestion that the requirements be put on a statutory basis offering some clarity and certainty as to whether or not an agreement is likely to be enforceable.  A decision by Mr Justice Mostyn earlier this week deemed an agreement unenforceable on the basis of unfairness. 

The position at this stage remains that the court should give effect to a prenuptial agreement that is freely entered into by each party with full appreciation of its implications unless in the circumstances it would not be fair to hold the parties to the agreement.  The type of things the court would consider are whether one party to the agreement placed the other under excessive pressure to enter into the agreement, the parties’ ages and maturity, whether either have been in previous relationships and whether or not the marriage would have gone ahead without the agreement being in place.  It is also necessary for each party to be aware of the precise detail of the assets of the other at the point of entering into the agreement and that each should have independent legal advice.  Also of importance is the fact that the parties should have adequate time to consider the terms of the agreement, as to complete it the day before a wedding may be deemed as one party being pressurised.

If couples have both been married before, have children from previous relationships, and have previously been in the kind of situation where all the appropriate factors have been considered, then they may be more likely to consider a prenuptial agreement.  But this type of agreement is as relevant for younger couples marrying for the first time as it is for subsequent marriages.   

One of the difficulties is the ability to provide for every eventuality.  Obviously, most couples can provide for when/if they have children, the advancement of their careers, perhaps inheritance and other events which may occur during the course of their marriage.  However, what about the things that we can’t plan for?  For example, life-limiting illness, long term disability or special requirements of our children.

The court currently retains complete discretion in applying the terms of a prenuptial agreement and will only enforce it to the extent that it considers it equitable to adopt the agreement in the specific circumstances of any case.  Events occurring after the agreement which would be considered are the length of the marriage, the parties’ needs when assessed against the agreement, the importance of the principles of sharing and compensation.  It is these factors which may then render the prenuptial agreement to be unfair, or partially unfair. 

In my view, this is something that requires thorough consideration.  On the one hand, I would agree that anything that allows couples to be in control of their relationships and their assets is welcome.  However on the other hand, it must be in a way that people are safeguarded and not left open to exploitation by the spouse/party in the stronger financial position. 

Before entering into a prenuptial agreement, or anything that affects your legal position, it is in your best interests to obtain independent legal advice.

Demelza Wrigley